Lesedi Project goes fund-finding again
Although the beginning is in sight for Tlou Energy’s Lesedi Project, the cash demands keep coming.
With a further cash injection required to get the gas-to-power project up-and-running, Tlou Energy has raised P5.85 million, after placing 19, 399, 332 new ordinary shares on both the Botswana and Australian Stock Exchanges, at the value of P0.30 per share.
The funds, sourced from Australian and United Kingdom sophisticated investors, will go towards the development of Lesedi Project, situated in Nyamakatse Ranch, 100km west of Serowe.
The initiative, which is the first electricity to be generated from coal bed methane in Botswana, has great potential, with a 10MW power purchase agreement already signed between Tlou Energy and the national power utility, Botswana Power Corporation (BPC).
Writing in the company’s annual report for 2023, Tlou Energy Managing Director, Anthony Gilby said everything was on course to be generating power by next year.
“Tlou pans to have the Lesedi gas to power project producing electricity in 2024 and remains driven to ensuring that the objective is met. Southern Africa continues to operate under severe energy deficit and this has potential to impose significant constraints on economic activity. As Tlou we aim to be part of solutions to solve the regional energy deficit beginning with integrating gas fired power into the Botswana grid,” outlined Gildy, explaining that with gas expected to be a vital part of the regional power mix in the coming years, Tlou Energy is well positioned to become an important power supplier.
Though no revenue has been earned from the project thus far, it is estimated that once operational, it will generate $10 million in revenue annually.
Unsurprisingly then, the company made losses amounting to $4, 241, 208 during the just ended financial year. Payments for exploration and evaluation assets amounted to $11, 886, 628 over the year, which included $5, 802, 386 on construction of transmission lines and substations which will connect the power facility to the national grid.
“The past year has seen Tlou making significant progress towards the target of supplying electricity into the national grid in Botswana. The transmission line work is nearing completion, substations are in progress and new wells are being completed ahead of expected gas flows. It has not been easy and it has taken a lot of time, effort and money to get to this stage and there remains significant challenges ahead,” warned Gilby.
As a result, additional funding was acquired in July, which included $14, 853, 721 in equity and $2 million loan received mostly from ILC Investment Pty Ltd, who are now the largest shareholders with 34.86 percent.